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Service tax on manpower

CA.Varalakshmi.M (Manager-Finance) (482 Points)

19 July 2012

Hi friends Gud mng all and All the very best to all CPT and CA final friends awaiting for results.

I wish this day would be a cherishable day in your life....

My Query is here...

suppose we provide manpower to different companies on contract basis .Those companies pay money to us,in turn we pay some amount to those contract employees taking into account thier attendence.Is it comes under Manpower services defined under Reverse charge mechanism .

I believe it comes under reverse charge mechanism ,but want confirmation once.

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18 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 19 July 2012

Yes your above view is correct.

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Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 19 July 2012

Yes...it is covered under reverse charge mechanism under Manpower Supply & Recruitment Services.

Anuja (-) (141 Points)
Replied 19 July 2012

No, it shall not be covered under Partial Reverse Charge Mechanism.

To be covered under this Vendor must be non corporate.

As you have stated that you are supplying manpower to companies, reverse charge shall not be applicable.

As far as nature of service is concerned , service is definitely manpower as resouces are working under supervision of vendor.

Trust it clarifies..

Regards...CA Anuja Garg

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 19 July 2012

The condition which you are mentioning is not for the vendor but for the service provider. Kindly go through the notification once more and if necessary amend your answer, if required.

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 19 July 2012

The service provider shall be an individual/HUF/LLP/Firm.

The service recipient needs to be a body corporate.

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Kamlesh Patel (SR.EXECUTIVE-COMMERCIAL) (23 Points)
Replied 19 July 2012

I agree with Ajit kumay dubey,as per the given condition the he is called service provider.hence Partial reverse mechanism is applicable.

Parihar Gopal (Corporate Taxation ) (392 Points)
Replied 21 July 2012

yes it coverd under purely on manpower supply contract , u need only pay 25 % of Service tax for the Invoice rest 75 % should be Paid by the service receiver

pppppppp (Partner) (53 Points)
Replied 21 July 2012

Suppose Supplier (of Labour) is Sending labour of Rs. 2 lac to a Corporate Entity and he is clamming that he is not liable to deduct Service Tax and also does not have Service Tax Registration as he is coming under SSI defination of Service Tax. Then whether a corporate entity is liable to deduct Service Tax ?

Sundaram Kumar (Chief Executive) (103 Points)
Replied 21 July 2012

Dear Experts

will you please provide the notification or circular number of the 25% Service Tax payable for the Corporate Companies for labour supply

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 22 July 2012

Mr Sundarm Kumar,

Please see the Notification No.30/2012 sl no.8 issued for reverse charge mechanism.

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Sundaram Kumar (Chief Executive) (103 Points)
Replied 22 July 2012

Thank you Sir

Kamlesh Patel (SR.EXECUTIVE-COMMERCIAL) (23 Points)
Replied 24 July 2012

Dear Mr. Mukesh Patel,

If you have avail service from menpower agency they you are required to pay Service tax at the rate of 12.36% on the 75% value.Dont be think about menpower agnency.

Dear Mr, Sundaram kimua,

For partial liability you may refer Notification No.30/2012-Service tax.

pppppppp (Partner) (53 Points)
Replied 25 July 2012

Thank u Kamlesh

Govind Inani (Business) (203 Points)
Replied 26 July 2012

As per notification No. 30/2012 dated 20.06.2012, If any individual or HUF or partnership firm is providing supply of manpower of service for any purpose to business entity registered as a body corporate, then the service provider will be liable to pay 25% of service tax and service receiver will be liable to pay 75% of service tax. Hence status of service provider and service receiver plays an important role here.